Liquid alternatives started the second quarter on a positive note as the Wilshire Liquid Alternative Index returned 0.6% in April, beating out the HFRX Global Hedge Fund Index’s 0.4% return.
Last month, the Wilshire index gained 1.5%. It is up 0.4% year to date but down 4.2% over the last 12 months.
In April, the liquid alternative relative value subindex, including credit, convertible arbitrage and volatility funds, was the top performer, up 1.4%, more than 50 basis points ahead of the HFRX relative value arbitrage index.
Wilshire noted in a statement that nearly every relative value credit manager recorded positive performance in April as credit spreads further tightened.
The liquid alternative event-driven subindex, incorporating credit, merger arbitrage and special situations funds, gained 0.4% in April, in line with the HFRX event-driven index’s return.
Wilshire said high yield credit and special situation strategies were the largest positive contributors, while merger arbitrage strategies underperformed as deal spreads widened in light of a more challenging regulatory environment.
The liquid alternative equity hedge subindex, which includes both long/short equity and market neutral funds, ended April up 0.2% for the month, 17 basis points ahead of the HFRX equity hedge index. Year to date, it is down 0.3%.